TLDR

  • Ilya Lichtenstein served 14 months out of a 5-year sentence for laundering 120,000 bitcoins.

  • He cited the First Step Act, signed by Trump, as the reason for his early release.

  • Lichtenstein’s wife, Heather Morgan, was also released early after an 18-month sentence.

  • Authorities recovered 94,000 BTC from the 2016 Bitfinex hack; 25,000 BTC remains unrecovered.

Ilya Lichtenstein, the person behind one of the biggest crypto thefts in history, has been released from prison early. He attributed his release to the First Step Act, a prison reform law signed in 2018 during Donald Trump’s presidency.

Lichtenstein was convicted in relation to the 2016 hack of Bitfinex, a major cryptocurrency exchange. He and his wife, Heather Morgan, were arrested in 2022 and pleaded guilty in 2024 to charges related to laundering nearly 120,000 bitcoins.

Ilya Lichtenstein Early Release Under First Step Act

On January 1, 2026, a post appeared on Lichtenstein’s official X account stating, “Thanks to President Trump’s First Step Act, I have been released from prison early.” The post also said that he remained committed to contributing to cybersecurity.

Trump’s First Step Act enables federal inmates to reduce their time in prison through earned credits and good behavior. A former Trump administration official confirmed to CNBC that Lichtenstein is now under home confinement, in line with Bureau of Prisons policy.

Federal inmate locator data showed a scheduled release date of February 9, 2026. However, Lichtenstein was already home, indicating he was transferred to supervised release ahead of schedule.

Heather Morgan Also Released Early

Heather Morgan, also known by her rapper name “Razzlekhan,” was sentenced to 18 months in prison. She was released after serving around eight months and shared the news on social media in October 2025.

She supported her husband’s statement and posted a photo of the two reunited, calling his return home the “best New Year’s present.” Morgan had previously thanked Trump for her own early release, referring to the same law.

Authorities say the couple laundered thousands of bitcoins from the Bitfinex breach through various means, including shell companies, darknet transactions, and physical gold.

Details of the Crypto Heist and Recovery Efforts

The led to the theft of 119,754 BTC. At that time, the assets were worth about $71 million. At current market values, that figure exceeds $10 billion.

U.S. law enforcement recovered approximately 94,000 BTC related to the crime. In early 2025, prosecutors filed a motion to return the recovered funds to Bitfinex.

Lichtenstein admitted to converting roughly 25,000 BTC into other digital assets and gold. Authorities are still tracking down the remaining stolen funds.

He has since cooperated with authorities, reportedly providing testimony against a crypto mixer used to hide the stolen bitcoin.

Trump’s Role in Crypto-Related Legal Cases

Although Trump did not issue a pardon or commutation for Lichtenstein, his administration’s reform law made the early release possible. The First Step Act remains in force, allowing reductions for eligible non-violent offenders.

Since returning to office, Trump has pardoned several individuals connected to crypto-related offenses. These include Ross Ulbricht, founder of Silk Road; ; and Changpeng “CZ” Zhao, the founder of Binance.

Some online users expressed support for Lichtenstein’s release, while others questioned the decision.